In a society where even prayers have a price range; price comparison websites perform the very essential implied service of associating quality with a product through a price point. Particularly since like devotion quality, user reviews are also scarcely discussed.
The online purchase process naturally mimics, to a very large extent the offline purchase process. The decision to purchase is the first act, followed by a review of prior purchasing experience. Depending on the extent and quality of personal information, the purchaser either terminates the decision process and completes the transaction or seeks further information.
The search for further information may assume the form of enquiries to other known purchases like friends and relatives (if it is a substantial expense) or searches through online information (if the expense is not substantial enough to bother one’s social circle or if the information from such source was not helpful in making the final choice). Search for online information may be restricted to known vendors (depending on prior purchasing experience) or become a broader search through multiple trusted vendor websites (for the same reason as previous). It is only at this point that price comparison websites feature in the purchase decision.
The predominant feature of this step in the decision process is, at a personal the absence of trustworthy information and apparently enough information, at the organizational end, to provide the trust required by the purchaser to make the final purchase decision. From a larger picture perspective, price comparison websites seem like overkill. After all, a purchaser arrives at this point if and only if several other steps fail and then the unlikelihood of a repetition of this step if the purchaser has a satisfactory purchase experience. Therefore, it begs the question, why do price comparison websites exist and how do they sustain themselves?
The simple answer is the unrelenting stream of consumers, given the population growth rate and progressive preference for online shopping. A median complexity is provided the various sets of consumer needs and preferences as increasing numbers of consumers from every stratum of society indulge in online shopping. A more complex and substantive answer is the implicit multiple modes of information seeking and processing behaviors that purchasers employ in this one step of the purchase process.
Information seeking and processing is in itself a very complex exercise with several known and unknown variables. Sources of information, quantity of information, quality of information (where seemingly irrelevant factors like language of the information provider can make the information seem acceptable or not!), age of information, number of informants are a few of the known variables. Personal preferences like number of sources of information, data points that are satisfactory before taking a decision are quasi known variables as not every consumer is actually aware of this point of satisfaction. Sometimes it is just the point at which the purchaser feels attracted to a particular unit at other times it could result from exhaustion from information overload!
Given that it is the quasi known variables that ultimately result in the decision, it is natural that price comparison websites try to provide as much information as possible in order to cater to every quasi and unknown factor in the ultimate purchase decision point of every consumer of every social stratum! The result is an abundance of information on price comparison websites ranging from vendors, brands to price points.
There is substantial academic and popular data (information overload on information overload!) supporting the negative impact of abundance of information on the decision-making process. As with any situation abundance, it is natural to categorize and hence reduce the abundance to its simple denominators.
For instance, in case of product information, the first level of categorization may be by required features and then desired features (bonus features); then one may consider prior experience with the vendor, reviews of the products that meet the specifications which generally ultimately leads to a set of results that make up the choice set. At this critical point, the price point becomes the decisive factor, all other factors having been equalized through the process of categorization, which leads to its becoming the implied symbol of the trustworthiness of all the steps that the purchaser has engaged in thus far. The price point, implies that the product will deliver on the specifications; the vendor will deliver on the SLA, the reviews will deliver the truthfulness of the user experience.
The purchaser believes that at the price point, all promises will be fulfilled. The chosen price point carries the weight of all the expectations of the purchaser because the purchaser never makes the decision purely on the price point, at the very first step. Hence, the importance of the implied integrity of price in the purchase decision. This is important from an economic perspective given the price inelasticity of the consumer. The price inelasticity is a cultural derivative because as a relatively resource-scarce society, the association between price and value is very strong as is evident from the price-value association even in prayers.